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Tracker

TelecomTV TRACKER

Sourced by TelecomTV's TRACKER platform
from IHS Technology Press Releases

Tracker

Network Functions Virtualization market worth over $15 billion by 2020, says IHS Markit

Via IHS Technology Press Releases

Jul 20, 2016

NFV software to account for bulk of revenue

LONDON (July 19, 2016) – The global network functions virtualization (NFV) market, which includes NFV hardware, software and services, will be worth $15.5 billion by 2020, according to the latest NFV Hardware, Software, and Services Annual Market Report from IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

“Between 2015 and 2020, the service provider NFV market will grow at a robust compound annual growth rate (CAGR) of 42 percent — from $2.7 billion in 2015 to $15.5 billion in 2020,” said Michael Howard, Senior Research Director, Carrier Networks, at IHS Markit.

NFV represents the shift in the telecom industry from a hardware focus to a software focus, with operators making much larger investments in software than in server, storage and switch hardware. “NFV software will comprise 80 percent of the $15.5 billion total in 2020 — or around $4 out of every $5 spent on NFV,” said Howard.

In 2020, only 11 percent of NFV revenue will be attributable to new software and services. Sixteen percent will come from network functions virtualization infrastructure (NFVI) — servers, storage, switches — acquired in place of purpose-built network hardware such as routers, deep packet inspection (DPI) products and firewalls. The remaining 73 percent will originate from existing market segments, primarily virtual network functions (VNFs).

The main value of NFV is in its applications, that is, the VNFs. “The service provider NFV market is larger than the software-defined networking (SDN) market throughout our forecast horizon of 2020, due to the pre-existing and ongoing VNF market,” said Howard. “We expect strong growth in NFV markets in 2020 and beyond, driven by service providers’ desire for service agility and operational efficiency.”

This latest NFV report tracks, for the first time, what service providers spend on NFV hardware and software to deliver software-based services to customers via the consumer virtual customer premises equipment (vCPE) and enterprise vCPE use cases. The vCPE use case opportunity, including spending to deploy consumer and enterprise services, is forecast to reach over $1.5 billion worldwide by 2020.

About the NFV Report

The 2016 IHS Markit NFV Hardware, Software, and Services Annual Market Report tracks service provider NFV hardware, including NFVI servers, storage and switches; NFV software split out by NFV MANO and VNF software, including vRouters and the software-only functions of mobile core and EPC, IMS, PCRF and DPI, security, video CDN and other VNF software; NFV services outsourced services for NFV projects; and NFV uses cases. The report provides worldwide and regional market size, forecasts through 2020, in-depth analysis and trends.

Related Topics
  • AI, Analytics & Automation ,
  • Data & Analytics,
  • Europe,
  • IHS Markit,
  • News,
  • NFV,
  • Research and Trials,
  • Tracker,
  • Transformation,
  • Virtualisation

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